Japan imported 6.88m tonnes of LNG in November, the lowest volume since June and down by almost 5% from the same month of 2013, official customs data showed.The fall in supply was triggered by another period of weaker demand from the key gas-fired electricity sector.Despite a fall of over 300,000 tonnes of LNG imports compared to October, Qatari deliveries rose month on month to 1.37m tonnes and the country was the largest supplier.

Of the other two largest suppliers, Malaysia delivered 1.29m tonnes with Australia delivering 1.23m tonnes.

Japan’s demand for LNG has been reduced because of mild weather early in the winter and high stock levels.

The number of countries supplying LNG fell as a result with no cargoes provided by European countries.

Falling spot prices made reload options from Spanish and northwest European hubs hard to work.

Deliveries from the Papua New Guinea LNG plant fell to the lowest level since the first month of supply in June. At 200,000 tonnes, this was below half October’s volumes.

A single cargo from Algeria was delivered aboard the 146,000cbm Golar Maria into Naoetsu where utility Chubu Electric has capacity. The vessel, controlled by Italian oil and gas major Eni, was delivered for a price of $14.61/MMBtu, customs data showed.

The weighted average price of all deliveries into Japan was $15.68/MMBtu compared with $15.97/MMBtu in October.

ICIS assessed Japan’s spot price for November in the mid $14.00s/MMBtu in mid September but sentiment turned weaker and the market slid close to $14.20/MMBtu by the contract’s expiry.

The impact of falling oil prices will be seen more clearly on overall costs of LNG into Japan in the first quarter of 2015, given the typical time lag factored into long-term purchase contracts.

Sluggish power demand

Total electricity sales made by the 10 largest power companies were down by 3.5% to 63TWh in November compared to the previous year, said the Federation of Electric Power Companies of Japan (FEPC).

Relatively high temperatures in mid to late November stemmed the need for demand from the heating sector in particular. Industrial gas demand was also down, falling by 1.2% year on year.

The decreases are in line with the prevailing weak tone seen over much of 2014.
Source: ICIS